“As Apple prepares to report its fiscal second quarter results after the bell on Wednesday, a huge question on investors’ minds is whether or not the stock’s multi-year run will finally come to end. While nothing is certain, there is good reason to believe the bearishness in Apple is over, and that a new powerful rally is looming on the horizon,” Andy M. Zaky writes for Fortune.
“If Apple is trading anywhere near the current price level come Thursday morning, the stock will become just as undervalued as it was during the financial crisis,” Zaky writes. “Why? Because unless Apple’s stock absolutely skyrockets over the next few trading sessions, its trailing price-to-earnings ratio — currently at 18.5 — is going to significantly contract due to the near 100% rise in quarterly earnings expected out of the company tomorrow.”
Zaky writes, “Apple’s trailing 12-month earnings per share is expected to rise from the current level of $17.92 to nearly $21.00 this week. This means that in order for Apple (AAPL) to maintain its already depressed P/E ratio, the stock would have to rise to $388.50 by Thursday. And that would only keep the stock trading at an 18.5 P/E ratio, which happens to be at the lowest end of its historical two-year range.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “krquet” for the heads up.]